1. Technical Field
The present invention relates to business models for managing foreign and domestic accounts receivable, and more specifically to client/server multi-user trade finance systems that assist manufacturers, traders and exporters in providing key trade finance information to financial institutions, credit insurance underwriters, insurance brokers and entities involved in the securitization of trade receivables.
2. Description of the Prior Art
The international markets for United States manufacturers, traders, and exporters have grown tremendously in recent years, and this growth has principally been fueled by new technology. Such growth has also included the development of new and varied distribution channels. All of this has placed a great strain on existing finance methods and departments to deal with accounts-receivable problems. Foreign and domestic buyers insist that manufacturers, traders and exporters sell products to them on open account receivables terms. Original equipment manufacturers (OEM's), distributors, and resellers are also seeking extended payment terms to allow themselves enough time to install and collect from the end user before having to pay the manufacturer.
New systems are needed that can reduce the credit exposure to foreign and domestic buyers, accelerate cash flow, improve and manage balance sheet efficiency ratios, etc. Requests for extended payment terms need to be accommodated, while avoiding high credit exposure, increased days sales, outstanding (DSO) and the offering of excessive cash discounts to accelerate collections. Such improved systems would be used to facilitate revenue recognition, and provide an overall increase in the return-on-capital.
Credit insurance can be used as a source of repayment for the purchase/financing of accounts receivable. But such requires that accurate and timely information be provided by manufacturers, traders, and exporters that includes routine periodic reports and useful historical data. Management systems need to properly track and control large numbers of insured open accounts receivable. It would be beneficial if the manufacturers, traders, and exporters had systems that would allow them to function as the financial institutions' collection agent. Such necessitates the ability to properly monitor, segregate, and quickly remit collected funds. Seeing how much of the committed insurance/credit limit capacity has been used according to policy, country, buyer, and other parameters established by the credit insurer and/or financial institution can also facilitate financing and claims processing.